News & Events

Simpson Thacher Corporate Partner Rajib Chanda was quoted in Ignites, a Financial Times news service, in an article discussing the possibility of steep regulatory costs cutting into the revenue for liquid alternatives.  The article discusses increased regulatory hurdles that private fund advisers, who are not used to complying with the ’40 Act regulatory and registration requirements, may face when establishing a liquid alternative fund.   Rajib noted that fund managers who are not well-versed in the ’40 Act can face additional challenges in getting up to speed and that there is significant due diligence required to ensure that the compliance programs of the underlying managers are reasonably designed. Rajib does not believe that these additional regulatory costs are so burdensome that they will scare away potential fund sponsors, especially given the higher fees that these alternative funds can charge compared to their more traditional counterparts, and commented, “There are certainly issues involved with alt funds, but anytime you launch a product, you are presumably thinking about the benefits versus the cost.”